The Royal Dutch/Shell Group's former chairman, Sir Philip Watts, received a severance package worth £1.06 million (US$1.93 million), the amount he would have earned had he stayed on until retirement, the company said on Friday.
Watts was asked to step down in March, after an internal investigation found that the company had overstated its oil and gas reserves estimates for several years.
He was the head of exploration and production, the division in charge of reserves, from 1997 to 2000, when much of the overbooking occurred.
Watts, who turned 59 on Friday, had been scheduled to retire in June next year.
Shell said Friday that Watts received the payment, rather than three months of salary, a more standard severance agreement in Britain, because he resigned from his post by mutual agreement with Shell's board rather than being forced out.
The severance package is in addition to a pension of £584,000 (US$1.06 million) a year.
Last year, he was awarded 1.165 million stock options, worth £582,500 if they were exercised at Friday's closing price, and a salary of £843,000 (US$1.5 million).
Some investor groups said the severance payment was a clear sign that shareholder rights were still too weak.
"We think that shareholders need the power to specifically approve or reject these termination packages," said David Somerlinck, corporate governance policy manager at Pensions Investment Research Consultants, a London firm that represents institutional shareholders.
Last year, the British government weighed legislation that would give investors the power to vote down rich severance packages, but the bill was not approved.
Shell should have awarded Watts three months of pay, the minimum allowed under his contract, Somerlinck said.
Shell is facing several class-action lawsuits and investigations related to its reserves estimates that could cut into earnings this year or next.
Regulators, including the Securities and Exchange Commission and the US Department of Justice in particular, may impose hefty fines, analysts say.
The company first cut its proven reserve estimates by 20 percent in January, then trimmed them three more times.
Tomorrow, Shell's directors and managers will face shareholders for the first time at two separate annual general meetings in London and Amsterdam.
Attendance is expected to be high, and small shareholders in particular are likely to use the forum to criticize Shell's corporate governance.
In response to an investor outcry after the reserve estimates were cut in January, Shell has agreed to rethink its unique dual-board structure.
Investors are anxious to be part of any revamping of the company.
Some investor groups have already put forward specific proposals about the issue that may be addressed at Monday's meetings.
The California Public Employees' Retirement System, or Calpers, and Knight Vinke Asset Management will ask Shell to include two outside investor representatives in their review process.
"We're not looking for confrontation for confrontation's sake," said Lucy Butler, a spokeswoman for the Association of British Insurers.
The group would just like to make sure that Shell is communicating with shareholders about any changes, she added.
Shell also said on Friday that the expiration date for 2,847,000 stock options Watts has outstanding had been moved up. The last of the options now expire in March 2009, rather than March 2013.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) investment project in Arizona has progressed better than expected, but it still faces challenges such as water and labor shortages, National Development Council (NDC) Minister Yeh Chun-hsien (葉俊顯) said yesterday. Speaking with reporters after visiting TSMC’s Arizona hub and attending the SelectUSA Investment Summit in Maryland last week, Yeh said TSMC’s Arizona site turned a profit of NT$16.14 billion (US$514 million) last year in its first full year of mass production. “TSMC told me it was surprised by the smooth trial run of the first fab, which has left the company optimistic about the project’s outlook,”
RSS